# Point price elasticity of demand

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The British Automobile Company is introducing a brand new model called the "London Special." Using the latest forecasting techniques, BAC economists have developed the following demand function for the "London Special":

QD = 1,200,000 - 40P

What is the point price elasticity of demand at prices of:

(a) $8,000

(b) $10,000

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#### Solution Preview

dQ/dP = -40

The price elasticity of demand is given by (dQ/dP)(P/Q) ...

#### Solution Summary

Point price elasticity of demand is examined. A complete, neat and step-by-step solution is provided.

$2.49